The state of cryptocurrency in Africa

Tegen MolefeResearcher at Blockpit with background in European law, grown up in Botswana (Africa) with great personal interests in cryptocurrencies.

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In the Southern African city of Gaborone in Botswana, a Private clinic known as Sharada Clinic receives Bitcoin as a form of payment for treatment. Dr. Donald Ariisa is the only health care practitioner in the entire state to accept Bitcoin. In his ply to adopt technologies that accommodate sustainability in offering accessible services, he felt Bitcoin to be a technology to be embraced by the world and the youth.

“All new technology is volatile, and there will always be early adopters that will prove the technology viable. I wish to be part of the birth of a new currency that creates so much freedom for humanity” - Dr. Donald Ariisa (Gaborone, Botswana)

Botswana's bitcoin economy Botswana is home to a small but active Bitcoin economy that encompasses startups, meet ups, a Blockchain hub and Bitcoin trading social media groups. There is only one offer on the global peer-to-peer Bitcoin exchange in the local Botswana Bitcoin market, willing to use the Botswana Currency, "Pula". Most bitcoin trading in Botswana currently occurs through dedicated Facebook and WhatsApp groups. Some Botswana Bitcoin users prefer to use South African exchanges such as Altcoin Trader, which allows direct Bank deposits.

The Bitcoin Startup scene in Botswana mainly consists of The Satoshi Centre, a blockchain Hub. Furthermore there are Plaas, a blockchain based farming platform provider, and Kgoboko, a blockchain powered financial service platform that aims to solve the problem of restricted access to funding and investment as well as low uptake and awareness of cryptocurrencies. Cryptocurrencies in Botswana remain unregulated. The Bank of Botswana has stated that it has no intention of regulating or studying cryptocurrencies. However, it is believed that the more blockchain startups launch, the regulator will be forced to take a closer look at this new technology.

Meanwhile, with the rest of Africa remaining to be painfully slow to the awareness and use of Bitcoins, Kenya, South Africa and Nigeria have a sizeable bitcoin economy compared to all other African countries.

Exchanges to launch in UgandaAccording to CoinMarketCap Binance is the largest international crypto exchange by 24-hour adjusted trading volume, seeing almost $1.8 billion in trades on the day to press time. The CEO and founder of Binance is called Changpeng Zhao. Binance has announced the launch of Fiat-to-crypto exchange in Uganda on Monday, Oct. 15. The new branch will officially start accepting deposits and withdrawals of Ugandan shillings on Wednesday, Oct. 17. According to a press release, Uganda’s national fiat can only be traded with Bitcoin (BTC) and Ethereum (ETH), but the exchange is planning to add more currencies.

Kenya builds Blockchain AI TaskforcePresident Uhuru Kenyatta of Kenya has ordered a Blockchain AI Taskforce to be created, to explore the use of blockchain technology within Kenya’s existing economic framework. Additional, BitHubAfrica, a Nairobi-based blockchain accelerator and advisory firm, aims to empower Kenyan blockchain and fintech startups. It is run by Kenyan bitcoin pioneer John Karanja who founded the company in December 2015. The company provides analytical, development, maintenance and support services for organizations interested in deploying blockchain solutions. BitHub also trains and hosts blockchain developers at the hub in Nairobi creating the best pool of expertise in this area across the African continent.

Regulations on crypto in South AfricaSearches for Bitcoin from South Africa topped world-wide Google search trends for the term in August 2017, according to techcabal.com. The country thus also thought of legal implications for cryptocurrencies. The South Africa Revenue Service (SARS) considers cryptocurrencies like Bitcoin as intangible assets and has said that it will apply normal income tax rules. This means that South Africans who own cryptocurrencies should start preparing to declare gains and losses on their portfolios as part of their taxable income. SARS states that the word “currency” is not defined in the South African Income Tax Act. Cryptocurrencies are neither official South African tenders nor widely used and accepted in South Africa as a medium of payment or exchange. As such, cryptocurrencies are not regarded by SARS as a currency for income tax purposes or Capital Gains Tax (CGT). Instead, cryptocurrencies are regarded by SARS as assets of an intangible nature.

Gains or losses in relation to cryptocurrencies can broadly be categorised with reference to three types of scenarios:

A cryptocurrency can be acquired through so called “mining”.

Investors can exchange local currency for a cryptocurrency (or vice versa) by using cryptocurrency exchanges, which are essentially markets for cryptocurrencies, or through private transactions.

Goods or services can be exchanged for cryptocurrencies. This transaction is regarded as a barter transaction. Therefore, the normal barter transaction rules apply.

Nigeria offers cryptographic development initiative The nation is showing an openness and unbiased approach towards understanding the intricacies of the cryptocurrency ecosystem. Blockchain activities in Nigeria are putting the nation on a solid technical foundation and this emergence of technology positions Africa as a primary beneficiary.

The Cryptographic Development Initiative in Nigeria (CDIN) is a non-governmental organisation that encourages the learning and practice of cryptography amongst relevant stakeholders from both the public and private sectors. It is subdivided into three groups: Crypto Nigeria, Blockchain Nigeria, and Nigeria Blockchain Alliance (NBA). The CDIN organised the Nigeria Blockchain Alliance Conference in 2017 to bring cryptocurrency experts and government officials together to discuss the opportunities that cryptocurrencies and blockchain technology bring to Nigeria.

Despite actions being taken in Nigeria, the Nigerian Deposit Insurance Corporation (NDIC) has warned the public against the use of cryptocurrencies because the Central Bank of Nigeria (CBN) does not recognize them as a legitimate currency.